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Can the private sector provide police and courts?

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I was pleased to be able to present this paper at the most recent Mises Circle in Las Vegas where I got to see some great people.

The realm of law is usually the foundation of government, and the suggestion that central control be abandoned shocks most people as something impossible. Philosophers, from Hobbes to Rand, believe that for all encounters there must exist one authority to create and enforce laws. They are baffled by what would happen if two parties had a conflict without an overarching judicial system. They assume that only the public sector can prevent and resolve disputes, but they have failed to notice the many private arrangements already in existence to deal with such dilemmas.

In the current world numerous non-government institutions protect individuals on both local and global levels. Examining these arrangements can give insight on how private law enforcement can function, thereby eliminating any need to speculate on how future firms might operate. The market allows consumers to choose different types and degrees of services and this could extended in the realm of law. Choice does not mean chaos and does not mean that people will be forced to deal with laws that they have not chosen. Most legal problems probably can be attributed to public law enforcement, so we do not need to assume that private law would be perplexed with the same dilemmas. A private legal system could allow individuals to agree ahead of time to follow certain rules. Judges would not need to compare individuals’ utilities; they would solely make judgments in accordance with consumers’ agreed-upon wants.

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Edward Stringham, Hackley Endowed Professor for the Study of Capitalism and Free Enterprise, Fayetteville State University

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